A more sustainable future: Can politically connected CEOs spur the nexus between ESG performance and firm financial performance?
研究2015-2022年中国A股上市公司，发现ESG绩效好的公司财务绩效也更好，但CEO政治关联会削弱这种正向关系，尤其在高政治关联企业中环境维度对财务绩效的负面影响更显著。
This study examines how politically connected CEOs moderate the relationship between ESG and financial performance in Chinese A-share listed companies from 2015 to 2022. The results demonstrate that companies with strong ESG performance tend to have better financial performance. The connection between ESG performance and financial performance is influenced by the political ties of the CEO. Specifically, companies led by highly politically connected CEOs exhibit a weaker link between ESG practices and financial performance when compared with less politically affiliated firms. Our heterogeneity tests demonstrate that companies with low technology and cross-listing, along with companies audited by firms outside the Big 4 and led by highly politically connected CEOs, show a more significant impact of ESG practices on their financial performance compared to those with fewer political connections. Further examination reveals that political connections exacerbate the adverse effect of the environmental aspect on financial performance. This study contributes to the ongoing discussions surrounding ESG issues, especially in the context of Net-Zero and climate change actions following the international Climate Change Conferences (COPs). Overall, this study contributes valuable insights and policy implications into the multifaceted dynamics of ESG factors and their impact on corporate financial decisions.